Completion evaluation

Introduction

The project covers the rural areas of the northern provinces of the Chuquisaca Department in Bolivia. Its cost was USD 21.0 million and the amount of the IFAD loan USD 13.8 million. The target group comprised 20 010 families of which 6 000 were provided with supervised credit. It was an integrated rural development project, including infrastructure and support services, implemented from October 1983 to September 1993.

The Completion Evaluation emphasized extensive fieldwork. The design, implementation and outcome of the project were discussed at length in communal assemblies and with peasant authorities. The assessment has greatly benefitted from the self evaluation work carried out by the project.

Effects

Project results have been mixed. Some components showed positive results, notably land rehabilitation, micro-irrigations, provision of drinking water and traditional handicrafts. Through land rehabilitation the project made an additional 900 ha. productive to the benefit of 1 800 families in 47 communities. It reversed erosion in several valleys and rehabilitated their most fertile areas.

Through micro-irrigation it achieved an expansion of nearly 1 655 ha. of irrigated area, more than doubling the area under irrigation to the benefit of 2 570 families. The component for the provision of drinking water had an important effect on the improvement of the health conditions of peasant beneficiaries (1 310 families in 24 communities). The traditional handicrafts component achieved a substantial increase in the family incomes of the women who participated in these activities (with an average increase of 55%), while simultaneously fostering the cultural characteristics of the indigenous population. These positive results are due to the originality and flexibility of the design of the components and to the participation of the beneficiaries.

But other components like supervised credit (35% of project costs) did not follow this pattern. The project was unable to create a sustainable credit system adequate to the needs of the peasants. By August 1993, the value of the outstanding loans was USD 4.7 million of which 62% was over due and had not been repaid (91% of the number of loans). This outcome was caused by the difficult institutional and economic context, outside the project's control: the closure of the Agricultural Bank, contradictory official announcements regarding the repayments of the loans and adverse weather conditions. On the other hand, it was in the context of this project that a successful innovation was developed which has also been used by other IFAD projects in Latin America: a credit software that computerizes the process of credit delivery and repayment, achieving a substantial reduction in the time taken to service the clients and, therefore, increasing the number of operations that can be serviced during peak periods, with a consequent reduction in average costs. In addition, the loan data for monitoring purposes is generated as a by-product.

A more thorough examination shows also an overestimation of the demand for credit in the poorer areas, high transaction costs and a supervision which did not allow for the timely detection of the problems.

The aquaculture and marketing components also had severe limitations. In both cases there were problems in their design, which was too ambitious and did not take into account the traditions and interests of the peasant communities and the complexity of the marketing process.

In general, the project achieved an improvement in the standard of living of the beneficiaries, but the effect was uneven and smaller than originally expected. The project strengthened local institutions and provided vigorous training in the area of development projects: several of the participants are now playing an influential role in other regional projects.

Lessons learned and recommendations

This assessment confirms the importance that IFAD must give to the analysis of the macro-economic and institutional setting which may, in many cases, outweigh the positive direct effects of a project.

The sustainability of some components is not guaranteed, as in the case of the credit component (which will need special attention from CORDECH in the following months). This evaluation suggests guidelines for future actions supporting two successful components notably, land rehabilitation and traditional handicrafts.